What does section 51 of ITTOIA 2005 Schedule 2 do?

Section 51 provides transitional rules for land-based concerns such as mines and quarries that were previously taxed on the actual tax year basis rather than by reference to a basis period. It ensures these concerns are brought within the standard basis period framework from 2005-06 onwards by treating them as new trades commenced on 6 April 2005.

How are mines and quarries treated from 2005-06 under section 51?

From 2005-06 onwards, a mine, quarry, or similar concern that was not previously taxed by reference to a basis period is treated as a brand new trade that started on 6 April 2005. The normal opening year basis period rules then apply, giving the concern a fresh start under the Income Tax (Trading and Other Income) Act 2005.

How does overlap relief work under section 51 for concerns not previously using basis periods?

The overlap relief provisions in paragraph 48 of Schedule 2 apply. Where those provisions refer to a basis period for any tax year before 2005-06, the reference is read as a reference to the earlier tax year itself, because no formal basis period existed under the old actual tax year method of assessment for these land-based concerns.

Which concerns does section 51 of ITTOIA 2005 Schedule 2 apply to?

Section 51 applies to land-based concerns such as mines, quarries, and similar operations formerly listed under section 55(2) of ICTA, where profits or losses arose in 2004-05 and were calculated on the actual tax year basis rather than by reference to an accounting date-linked basis period.

Income Tax (Trading and Other Income) Act 2005 section 51

Profits of mines, quarries and other concerns not chargeable by reference to a basis period

Section 51 deals with the transitional treatment of profits or losses from land-based concerns such as mines and quarries that were not previously taxed by reference to a basis period, ensuring they are brought into the new rules from 2005-06 onwards.

Applies where profits or losses from land arose in 2004-05 from concerns such as mines or quarries and were not calculated by reference to a basis period
For 2005-06 and later tax years, the concern is treated as a new trade started on 6 April 2005 for the purpose of determining basis periods
Overlap relief rules under paragraph 48 of Schedule 2 apply, with references to basis periods for earlier tax years read as references to those earlier tax years themselves
This ensures a smooth transition into the basis period rules without creating gaps or double taxation of income

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